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Cosi's sales, traffic turn positive in 2Q

Shares of Cosi Inc. jumped more than 18 percent Friday after the company reported its first positive same-store sales since 2008.

For the past several quarters, much of Cosi’s momentum for a turnaround had come from cost cutting, while sales and traffic remained negative at the fast-casual brand of 144 restaurants. The chain reported late Thursday, however, that same-store sales and traffic both swung positive in the June 28-ended second quarter of 2010.

Cosi's stock price rose 18.6 percent Friday, closing at 83 cents. The company's shares have traded between 43 cents and $1.46 over the past 52 weeks.

Cosi will not report full second-quarter earnings until Aug. 12, but preliminary results revealed that systemwide same-store sales rose 3.1 percent, which included increases of 3.3 percent at corporate restaurants and 2.6 percent at franchised locations. The sales jumps reflected a 3.1-percent increase in traffic at corporate locations and an uptick of 2 percent in the average check, Cosi said.

“We are encouraged by the positive trend in systemwide comparable sales we experienced in the second quarter, given the continued challenging consumer environment,” said president and chief executive James Hyatt. “Our company-owned restaurants finished the quarter strong, achieving a 5.5-percent increase in comparable sales in the month of June. We believe we are benefiting from our expanded marketing efforts to broaden our consumer reach and drive traffic in multiple dayparts.”

Total second-quarter revenue fell 6.4 percent to $29.6 million, compared with $31.6 million in the year-earlier period. During the quarter, Cosi sold 13 corporate units in the Washington, D.C., area to Capital C Restaurants. As a result, corporate net restaurant sales decreased 7.8 percent to $28.6 million, compared with $31.0 million a year earlier. Franchise fees and royalty revenues contributed $1.03 million to Cosi’s top line, compared with $621,000 the year earlier.

Deerfield, Ill.-based Cosi operates 86 restaurants and franchises another 58 units in 18 states, the District of Columbia and the United Arab Emirates.

Contact Mark Brandau at [email protected].
 

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